Audiovox 2001 Annual Report Download - page 40

Notes to Consolidated Financial Statements (Continued) 38 Audiovox Corporation and Subsidiaries
November 30, 1999, 2000 and 2001, respectively, and Eurodollar
Notes at 1.50% above the LIBOR rate which was approximately 6.48%,
6.8% and 3.38% at November 30, 1999, 2000 and 2001, respectively.
The Company pays a commitment fee on the unused portion of the
line of credit.
The credit agreement contains several covenants requiring, among
other things, minimum levels of pre-tax income and minimum levels of
net worth. Additionally, the agreement includes restrictions and limita-
tions on payments of dividends, stock repurchases and capital expen-
ditures. At May 31, 2001 and the first quarter ended February 28,
2002, the Company was not in compliance with certain of its pre-tax
income covenants. The Company received waivers for the May 31,
2001 and February 28, 2002 violations and has not received a waiver
for the November 30, 2001 violation related to pre-tax income.
Accordingly, the bank obligations of $86,525 have been classified as a
current liability on the accompanying consolidated balance sheet.
Management is in the process of obtaining a waiver for the violation.
Subsequent to November 30, 2001, the Company repaid $79,800 of
its $86,525 obligation at November 30, 2001, resulting in bank obliga-
tions outstanding at March 15, 2002 of $6,725.
The Company also has revolving credit facilities in Malaysia
(Malaysian Credit Agreement) to finance additional working capital
needs. As of November 30, 2001, the available line of credit for direct
borrowing, letters of credit, bankers’ acceptances and other forms of
credit approximated $5,242. The credit facilities are partially secured
by three standby letters of credit of $1,300, $800 and $1,400 and are
payable upon demand or upon expiration of the standby letters of
credit on January 15, 2002, August 31, 2002 and August 31, 2002,
respectively. The Company renewed the January 15, 2002 letter of
credit. The obligations of the Company under the Malaysian Credit
Agreement are also secured by the property and building owned by
Audiovox Communications Sdn. Bhd. Outstanding obligations under
the Malaysian Credit Agreement at November 30, 2000 and 2001
were approximately $4,693 and $3,514, respectively. At November 30,
1999, interest on the credit facility ranged from 7.4% to 9.6%. At
November 30, 2000 interest on the credit facility ranged from 7.25% to
7.50%. At November 30, 2001, interest on the credit facility ranged
from 6.5% to 7.0%.
As of November 30, 2000 and 2001, Audiovox Venezuela had notes
payable of approximately 2,354,600 and 1,622,834 Venezuelan Bolivars
($3,411 and $2,074 at November 30, 2000 and 2001) outstanding to a
bank. Interest on the notes payable is 10.7%. The notes are scheduled
to be repaid within one year and, as such, are classified as short term.
The notes payable are secured by a standby letter of credit in the
amount of $3,500 by the Company and is payable upon demand or
upon expiration of the standby letter of credit on May 31, 2002.
The Company also has a revolving credit facility in Brazil to finance
additional working capital needs. The Brazilian credit facility is
secured by the Company under a standby letter of credit in the
amount of $100, which expires on October 1, 2002 and is payable
on demand or upon expiration of the standby letter of credit. At
November 30, 2001, outstanding obligations under the credit facility
were $254 Brazilian Bolivars ($100), and interest on the credit facility
ranged from 24% to 27%.
At November 30, 2001, the Company had outstanding standby letters
aggregating credit of $604 which expires on various dates from May 10,
2002 to July 31, 2002.
The maximum month-end amounts outstanding under the credit
agreement and Malaysian Credit Agreement borrowing facilities during
the years ended November 30, 1999, 2000 and 2001 were $110,595,
$156,854 and $94,291, respectively. Average borrowings during the
years ended November 30, 1999, 2000 and 2001 were $29,835,
$52,010 and $49,692, respectively, and the weighted average interest
rates were 9.6%, 8.9% and 8.2%, respectively.
(b) Documentary Acceptances
The Company had various unsecured documentary acceptance lines
of credit available with suppliers to finance inventory purchases. The
Company does not have written agreements specifying the terms and
amounts available under the lines of credit. There were no documen-
tary acceptances outstanding at November 30, 2000 or 2001.
The maximum month-end documentary acceptances outstanding dur-
ing the year ended November 30, 2000 was $997. Average borrowings
during the year ended November 30, 2000 was $164, and the
weighted average interest rate, including fees, was 6.6%. There were
no documentary acceptances outstanding during the year ended
November 30, 2001.
(12) Notes Payable
A summary of notes payable follows: November 30,
2000 2001
Note payable due to Vitec (Note 4(a)) $4,514 $4,051
Note payable due to Pearl (Note 4(a)) 1,354 1,216
$5,868 $5,267
The notes bear interest at 5% and are payable in equal monthly install-
ments over a six-month period beginning in October 2000. As a result
of the extension of Shintom’s option to repurchase the Property or
purchase all of the shares of stock of AX Japan (Note 4), the com-
mencement of repayment was delayed to April 2001 and again to
March 2002. Accordingly, the notes payable have been classified as
current in the accompanying consolidated balance sheet.
(13) Long-Term Debt
On March 15, 1994, the Company completed the sale of $65,000,
61⁄4% subordinated debentures due 2001 and entered into an inden-
ture agreement. The subordinated debentures were convertible into
shares of the Company’s Class A common stock, par value $.01 per
share at an initial conversion price of $17.70 per share, subject to
adjustment under certain circumstances. The indenture agreement
contained various covenants. The bonds were subject to redemption
by the Company in whole, or in part, at any time after March 15,